We should all be giving away at least 5% of our income and the rich should hand over up to a third, argues philosopher Peter Singer in his new book The Life You Can Save, that came out last week. While we don’t share Singer’s rather puritanical disapproval of the lavish lifestyles of the super-wealthy – he singles out Paul Allen, the co-founder of Microsoft, for his yacht, submarine and collection of vintage military aircraft and only grudgingly gives him credit for donating at least $900m – we support his call for more philanthropy, especially by the wealthy
Singer’s book is an extension of an article he wrote for the New York Times a few years ago, which we discuss in some detail in the book. His argument has three steps: a) that the suffering of people in poorer countries is bad; b) that it is morally wrong to do nothing to address this suffering if you can; c) that by giving to charity you can do something about this suffering. Hence we should all hand over some cash to help the poor, and the more we have the more we should give.
The step in the argument that is problematic for many people is the last one – that giving to aid agencies actually makes a positive difference (see for example the attacks on the aid business by Bill Easterly and, more recently, Dambisa Moyo). Singer explains how charities have traditonally been reluctant to provide hard evidence that their programmes have real impact and goes on tell the story of GiveWell, which was created in 2007 by two hedge funders, Holden Karnofsky and Elie Hassenfeld, to offer assessments of nonprofits based on their impact. GiveWell is part of the new infrastructure of philanthropic intermediaries that we describe in the book, which are trying to increase the quantity and quality of philanthropy by getting serious about measuring effectiveness. This quantitative approach, borrowed from the world of finance, has its critics, so it is interesting to see that Singer identifies the lack of transparency about impact as a big obstacle to giving. Nonprofits please take note.
One of the other reasons that people don’t give more, according to Singer, is what he calls the “diffusion of responsibility effect” – that when there are many other people who could help, we all tend to leave it to others, so nothing gets done. Then add to that the “sense of fairness effect” – the fear that even if we do our bit, others won’t do theirs, so we are being taken for a ride – and there are some pretty strong psychological disincentives to giving.
An important gap in Singer’s discussion of these disincentives to give is that he doesn’t look at the impact of government spending reinforcing stinginess. In our view this may explain why countries with bigger government (Europe) have a lower propensity to give than, say, America: in countries where citizens expect the state to provide there may be a tendency to assume that the needs of the developing world are being taken care of through the tax system, hence there is no individual responsibility to give and it feels “unfair” to be asked to give as well as pay taxes.
If the state admits that it does not have all the answers and that donors can do things that government cannot (i.e. philanthropy is not just a substitute for higher taxation) this helps to address the diffusion of responsibility and fairness obstacles to giving. That is one reason why we argue for a new social contract for philanthrocapitalism, based on the understanding that there should be a division of labour between government and philanthropy. If society admits that government cannot do it all, it is much harder to argue that the individual has no responsibility.